Closed

Loop
Marketing
Introduction
While every department in an organization contributes to the success of that organization in one way or
the other, only a few are as important to this success as the marketing department. The reason is
simple: every organization is established for the purpose of selling something whether services or
products, and the marketing department is responsible for connecting with, and attracting those people
who will purchase what that organization is offering. In other words, without the marketing department
to attract and find a way to appeal to the perceived customers of an organization, the organization will
not achieve its purpose.

Since marketing is so important to the success of an organization/business/company, it follows that a

large percentage of the resources (efforts, budget, etc.) are directed at it. A lot of companies end up
wasting precious resources, however, as they do not know which marketing strategy is effective and
attracts customers, and which one is not.

Closed loop marketing seeks to bring certainty to the whole marketing process. By using data collated
from the actions that customers take and analyzing them, companies can better understand customer
behavior and then use this to find out which of their marketing strategies is effective. They can then
focus all their effort on this particular strategy and use it to attract more customers to purchase what it
is they offer. This, in effect, results in companies getting a higher return on investment (ROI) than they
normally would. As such, they get to use their resources more efficiently. Closed loop marketing involves
the use of advanced web tools such as Google analytics to understand customer behavior, among other
things.

This eBook is about closed loop marketing. It begins by defining what marketing is, and then examines
what closed loop marketing is in detail. Thereafter, it explores why companies are using closed loop
marketing (which, in other words, refers to the benefits of using this particular marketing style), as well
as how it works.

In short, this eBook goes into the nitty-gritty of what closed loop marketing is, and in doing so, it makes a
great case for why all of us should adopt closed loop marketing as the overarching marketing technique
we use.
What is Marketing?
Marketing refers to the process through which businesses or companies make people interested in the
products or services they provide. In other words, it is the sum total of activities carried out by a
company in a bid to promote the sale of their products or services. This often occurs through market
research, market analysis and the understanding of what the ideal customer is interested in. Virtually all
aspects of business, including sales, advertising, sales, the methods of distribution and product
development are engaged in marketing.

Marketing includes the processes of advertising, selling and delivery of products to people who will
consume it or to other businesses. Other things that constitute it are; networking with potential or past
clients through acts such as playing golf with a prospective client, writing thank you emails, sending out
follow up emails, making phone calls, meeting with clients for a meal or drink, the distribution of prints,
and social media, among others.

In essence, there are four Ps of marketing named product, price, place and promotion. And they are the
essential components required by a company to market a product or service.

 Product: This refers to an item or items that a business offers to its customers. The product
seeks to fulfill a need of the consumer. Before a marketing campaign can be embarked upon,
the marketer needs to understand what the product or service is about, what makes it stand out
from other similar product or services, etc.
 Price: This refers to the amount the company is willing to put the product or service up for.
During the process of establishing a price, companies need to consider the unit cost price, costs
of distribution and costs of marketing, as well as the price of similar products among others.
 Place: This refers to the processes attached with the distribution of the product. This includes
the channel the company will use to sell the products. It could be sold online, through a physical
storefront or both channels.
 Promotion: This refers to the integrated aspects of the marketing campaign. It includes a variety
of activities ranging from advertising, sales promotions, selling, public relations, sponsorship,
etc.

All of these are the individual aspects contained in marketing.

What is Closed Loop Marketing?
As has already been established, marketing is crucial to the success of any company, whether big or
small, which is the reason why a major part of the budget of these companies is spent on marketing and
advertising campaigns. With the large amount of money that companies thus spends on marketing and
advertising, it is only natural to expect that they will want to see the results of their efforts, which is the
attraction of more clients to the company, and the purchasing of what this company offers whether
products or services. For this reason, there is the need to devise a means by which the success or
otherwise of a marketing cum advertising strategy can be measured. And this is what closed loop
marketing is: a means by which a company’s can confirm the success or otherwise of its marketing
strategy.

When we talk about closed loop marketing, we are referring to the practice of companies to gather data
and information from their marketing strategies and campaigns to use in determining whether such
strategy/campaign is effective or not. The gathering of these data is done via the use of online tools such
as Google Analytics. In other terms, it is the determination of customer behavior through the collection,
analysis, and leveraging of customer data. This is done on a continuous basis and runs through the entire
span of a consumer lifecycle.

For closed loop marketing to be effective, the sales department and the marketing department of a
company have to work hand in hand. That is to say that the two departments are working constantly
communicating and informing each other about developments in their departments to determine what
is working effectively and what is not. As such, the sales team provides the marketing department with
sales information, which is then used to convert prospective customers, otherwise known as leads, into
paying customers. Closed loop marketing takes things several steps further than the traditional sales
funnel, which simply converts leads (prospective customers) to revenue (paying customers). How closed
loop marketing does this is by locking these customers such that instead of purchasing from the
company the one time, they purchase continuously. That is to say that it focuses in making every
customer a long-term paying customer instead of a one-time customer.

Consider a situation whereby the marketing department of a company is running two different
marketing campaigns. Would it possible for them to determine which of their campaigns is more
successful, and as such, is driving more sales without word from the sales department? I think not. If
such a marketing department didn’t work hand in hand with the sales department to know which
campaign works better, then, instead of focusing all their efforts on that particular campaign so as to
drive more sales, they would just be wasting resources pushing strategies and campaigns that do not
work as well. If this hypothetical marketing department was in cohorts with the sales department on the
other hand, they would know which of their campaigns is driving more engagements, and as such, is
resulting in more sales. A knowledge such as this will allow them to focus more on that strategy that is
working, which will then result in them being able to tweak it to make it even better, and as such,
eventually lead to even better sales.

Also, if the sales team has knowledge of which type of marketing campaign works better, as well as the
reasoning behind it, they will be better able to understand what prospective customers wants, which
will result in them being able to tweak their messaging to address those wants and needs. The resultant
effect will be even more sales and a higher return on investment (ROI) for the company.
An approach such as this, where data drives the marketing efforts of a company is what is known as
closed loop marketing.

This does not, however, mean that the marketing department itself is not keeping tabs on whether or
not their strategies are effective. In fact, determining the effectiveness or otherwise of a particular
campaign/strategy through the use of sales alone is now an obsolete method as there are various
technological tools that are being used these days to determine this. I have talked about the several
ways by which closed loop marketing is implemented in other chapters. I think you will do well to fully
understand them, and thereafter, implement them in your marketing strategies so that you can plan,
and run better marketing campaigns that will yield more success.
Why closed loop marketing?
The primary goal of practically every marketer is to: increase conversions at a reduced cost, improve the
knowledge of customers concerning the product or service being marketed, collaborate more effectively
with the sales team, and better visualization of the results of the whole process of marketing.

Essentially, the following are some of the reasons why you should make use of closed-loop marketing:

Increase in conversion rates

Using closed loop marketing makes it easier to identify the communications or channels that are
generating the most sales. This is because closed-loop marketing provides information as to how the
audience interacts with the brand and its content, which makes it easier to compare the channels that
are most efficient in conversions, as well as the most relevant content.

In essence, the more information you have concerning the channels, tactics and contents that work, the
more chance you have to focus on these channels and contents, and use them to generate more leads.

Reduced marketing costs

As a marketer, it will be unwise of me to keep allocating budget to all the channels that generate sales
after I have identified the most efficient ones. All I simply need to do is to allocate more resources to the
channels and areas that generate the better ROIs and forgo the weak marketing initiatives with lower
ROIs. It helps to set realistic goals and expectations that will allow me to determine the maximum
amount for the marketing budget.

360° Customer View

When sales and marketing are integrated in closed-loop marketing, the company will have the total
picture of the customer. That is to say that using closed loop marketing makes us privy to all the
information available in the sales cycle, which will allow us to learn more about the behavior, needs,
challenges and triggers of the consumer. This works based on the fact that, the better we understand
what motivates our audience, the more effective our efforts will be, because they will be tailored
towards the particular needs, challenges, triggers, etc., of the audience that has been identified.

With closed-loop marketing, we will be able to identify the different steps our users are taking until they
eventually make their purchase, which is an avenue for us to better understand the different processes
involved in buying, as regards each customer. Some of this insightful information include: the pages they
visited, how they landed on our website, when they became a lead, what led to their conversion, etc.

Improved Customer Experience and Satisfaction

Personalization has made it possible to tailor channels and contents based on the preferences of the
user. As previously mentioned, the data that is provided can be analyzed, and used to identify the major
trends in the path taken by each group of customers. It is this information that is used to tailor the
marketing campaigns to the different groups, which ultimately makes the campaigns more effective.

The change effected during this phase will have a tremendous impact on the sales cycle (as it will
shorten it), and optimize the journey of the customer on our website. It helps them to save search time,
reading time etc., and therefore increases the chance that the customer will make the right choice.
Improve your marketing strategy

It is important to note that the behavior and path taken by customers will not remain the same across
time. Despite this, it is easy to remain in touch and adopt the new path taken by the customer, which
involves their new needs, desires, challenges, etc., as long as we remain in touch with what they want.
Closing the loop around the data of our marketing analytics and our customer relationship management
ensures that we remain in touch.

Closed-loop reporting allows us to continuously update and improve our market information with every
new information we acquire, so that we always remain in control.

A more effective lead management

Closed-loop marketing helps to improve lead management by bringing both marketing (which is pivotal
to lead generation) and sales (which is important for follow-up) together, as has been discussed. If some
of the leads generated do not convert into customers, the company will still be in possession of reliable
data that can be used to identify the failures in the process if managing the leads, and work towards
fixing them.

Better Understanding of the ROI

It is often difficult, if not impossible for marketers to determine what their ROI will be, based on the
efforts they use to market. However, with closed-loop marketing, you know the channels that led to the
sale, the campaigns and content that generated the most conversions, and much more. Since each
conversion has its initial channel, it is easier for the marketing company to understand the methods of
each channel.
How does closed loop marketing work?
The basic tenet of closed-loop marketing is the tracking code. In order to identify the source of origin of
the visitor, certain tracking codes, such as UTM parameters, are incorporated to the end of the
company's URL. It is this attached part that helps to track the path taken by the visitor(s), all through
their journey through the use of Google Analytics or other marketing software.

The process of closed-loop marketing can be split into four steps which are described below:

Step One: Set a cookie on the referral source of the visitor, when on our website

This is where the closed-loop system starts from. As the visitors move through your sales and marketing
sections, the cookie will allow you to associate then with the appropriate channel. For instance, the
channel through which they arrived on your website could be a URL you provided them via an email
marketing campaign, prints you distributed at a trade show or a search term.

The easiest way through which we can close the loop would be by making our website the central hub
for all the marketing activities we intend to carry out. These marketing activities include, social media
marketing, email marketing, paid search, offline campaigns, referral links, organic search etc., and they
should filter to our website. When a visitor comes to our website, we will be able to set the cookie on
them and begin to track their activity on that website.

There are several web analytics systems that can allow us to track the various sources of traffic to our
website, such as referring websites or search terms, however, there is a need to make sure that we are
delegating our leads to the right marketing approach. In order to achieve this, we need to set a tracking
URL to all the marketing campaigns directing traffic to our website.

In an attempt to create the tracking URL, we have to include a parameter to the end of our website's
link, which our analytics system needs to identify and associate with a particular marketing campaign or
initiative. This is going to further allow us to track the visitors on our website more accurately. This
tracking token needs to be inserted at the end of a link, which will allow the analytics tool to generate a
particular group of traffic. There are different tools employed in closed-loop marketing, and each tool
makes use of different tokens.

For instance, the following is an example of what the token from Facebook would look like

/?utm_medium=social&utm_source=facebook

When we attach this token to our URL, it would signal to our analytics tool that the visitor who clicked
on that link is coming through Facebook. The same type of tracking token applies to different channels,
which includes email, paid media, referral traffic etc. Before we can proceed, we need to ensure that our
marketing or analytics software works optimally, that the tracking tokens we want to use are in place,
and finally that the data from the visit are put in their proper categories.

Step Two: The cookie goes into action as the visitor browses through our website

As the traffic on our website increases, we need to identify its source, and track the behavior of the
visitors, which would include: looking to see the trajectory of their actions, the section they are viewing
on the website? These bits of information may seem irrelevant now, but they may prove useful down
the road, and illustrate a path that we have to take in order to optimize our website for a faster
conversion from visitor to lead, or visitor to customer.

This part of the process of closed-loop reporting is the trickiest, and it involves making sure that we can
connect the lead information of the visitor, with his/her live session, when they convert a form. Without
this section, there are going to be two different databases, one of which would include an anonymous
visitor history, and the other, information about the visitor who has now become a lead. As a result of
this, we would not be able to connect those leads back to their respective marketing source.

In order to make this work, we could decide to engage in something technical on the back end of our
analytics platform, or we could simply start using software that can do that for us.

Step Three: Visitor converts into a lead after completing and submitting a lead-capture form

Before we can monetize the traffic we are getting on our website, or send qualified marketing prospects
to our sales team, we need to convert the visitors we have to leads. This can be achieved by directing
incoming traffic to the landing pages of our website, which would enhance the exchange of information,
as well as the collection of data from the visitors on the page.

The importance of knowing where the visitors are coming from has been established. More importantly,
however, we need to know who these visitors are. This is vital to closing the loop and being able to
connect these closed customers back to their source of entry. In order to capture this information, we
need to direct the visitors on our website to the landing page, on which there is the submission (or lead-
capture form), which they will then be required to fill. By the time the visitors complete filling the form,
we will have the contact information we have requested from them, which could be their name, email,
phone number, etc.

Note: In order to increase the database of our leads, we can direct majority of the traffic on our website
to the landing page and the form.

Step Four: The lead finally becomes a customer, and credit is assigned to the original source

After we have been able to convert the visitors to leads, it is time to figure out how we can transform
the visits to sales. This would involve providing answers to some basic questions, which includes; which
one of our marketing channels attracted the most costumers to our website? Which methods can we
employ, in order to optimize the marketing process for the marketing channels lagging behind? It is
easier to answer these questions in closed-loop marketing because this style allows us to identify the
activities that attracted the largest amount of revenue and the ones that attracted the least.

To do this, we need to take a look at all the leads our sales team have already closed, and assign them to
the original marketing approach employed. If we are able to set everything up appropriately from steps
one through four, it would be an easy process. If our business is medium-sized, the easiest way we can
do this will be through our Customer Relationship Management (CRM) system, while working manually
with a spreadsheet would work for smaller businesses.
Tools for closed loop marketing
It is worthy of note to mention that the processes involved in closed-loop marketing are largely
dependent on tools, as might have been observed. Before we can successfully set up the closed-loop
marketing system, we need to be able to connect the marketing activities to sales, which basically
involves connecting both our marketing software and the customer relationship management system.

In simpler terms, we need to connect the intelligence emanating from the marketing communication we
have made with our former, current and prospective customers, to the intelligence that our team has
created with these same set of people.

Basically, the process of closed-loop marketing uses two different tools. They are:

 Customer Relationship Management Software and

 Marketing Software

Customer Relationship Management Software: it is also known as CRM software and it is used by both
sales and marketing teams to track customers and potential customers. It also helps us to store the data
of our customers across all departments. Essentially, the purpose of the CRM software is to synchronize
the activities carried out by our customer support, marketing and sales teams.

There are various ways by which this software can support our business, ranging from identifying and
rewarding loyal customers, to selling and fulfillment. The most commonly known CRM systems are SAP,
Oracle, SugarCRM and Salesforce.

Marketing Software: this software is primarily the key to the closed-loop marketing system, as it is
responsible for tracking customers across a website. The cookies that were attached to the browsing
session of potential customers are eventually connected to the lead in the CRM. Marketing software
platforms help to track campaign performance, SEO metrics, social media and other marketing activities.

Examples of marketing software include: HubSpot, Marketo, Outmarket, etc. They keep a record of the
marketing data and make it actionable by providing the information necessary to enable lead
conversions, optimize campaigns and reveal results.

Integrating the Two Tools

We need to have the two marketing tools communicating with each other in order to have an effective
marketing system. The only way by which this can take effect is through an Application Programming
Interface (or API). Having both systems communicate provides that when a member of our sales team
closes a deal, and marks the sale as "won" in the CRM system, an update will be triggered in the
marketing system.

We will then have to backtrack, so as to identify the source of the new customer. It could include
providing answers to questions such as, from which channel did they come to our website? Which pages
did they view while on our website? At what point did they stop being a visitor and became a lead or
customer?
Best Practices in Closed-loop Marketing
Utilize data management

The quality of the data gathered is crucial in closed-loop marketing, because it is one of the
determinants of how effective the marketing strategy used will be. This is why when gathering data, we
should make sure our company gathers only accurate and usable data. The loop in this marketing
system does not begin with the website, rather it begins at the source from where the visitor comes into
the website.

Effective data collection and maintenance is essential because it helps to ensure the integrity of the
database we have gathered for our leads and customers. In order to engage in effective data collection
and maintenance, we need to make sure there is a system in place that we can use to keep our data
clean and standardized.

Certain resources such as Google Analytics can be used to indicate the percentage of visitors who clicked
through to our site through the different organic results, thereby providing data that can be used to
evaluate our SEO practices and online ad.

Score and Rank Leads

Scoring leads can be difficult because the methodology attached to it is always evolving based on the
way the company chooses to seek out and develop leads. Depending on the practice of our company,
we will have to create a scoring system that can be used to determine the rate at which sales leads can
attract potential customers. After this, we will then rank the lead methods, giving preference to the
practice that generates the most sales.

Essentially, lead scoring refers to the process where the sales readiness of leads is decided by
predetermined ranking methodology.

Nurture Lead Progress

One of the mistakes marketers make is that they neglect to follow through on leads after they have
been created. As a result of this, they tend to lose out on a lot of opportunities as regards visitors that
would have otherwise become customers. With this in mind, we need to ensure that leads are
converted to customers, because leads cannot remain leads for a long time, they either become
customers, or the visitors lose interest and stop visiting the site.

In order to avoid having leads sit idle, and eventually die, we will have to set a time limit within which
our leads can be nurtured. When these leads remain idle past the deadline, they should be recycled for
further nurturing. This is because nurturing leads ensures that the company moves and interacts with
prospects even when they are not ready to engage with their products.

Enable communication between sales and marketing

There has always been a form of disconnection between sales and marketing departments. However,
closed-loop marketing has evolved overtime to defeat this trend of disconnection since it requires that
the two different teams communicate effectively throughout the process of marketing and sales
nurturing.
Communication is a vital part of designing marketing campaigns that are going to succeed. More
importantly, it is necessary that the sales and marketing teams establish a system of communicating
effectively among themselves, as they are pivotal to the development of the company.

Measure the ROI for your Marketing Campaign

At the end of the day's work, every company head wants to see the investments they have made turn
up a positive ROI. And not just the company head, everyone will like to know that the result of the day’s
work was great. This will be evident in not just the volume of the ROI but also in the number of leads
generated, the number that were nurtured, and the amount of revenue that was generated as a result
of the marketing campaign. Closed-loop reporting should be able to determine the effectiveness of the
marketing campaign and the total ROI.
Conclusion
Before the advent of closed loop marketing, companies, businesses, and organizations had virtually no
idea about why a particular marketing strategy is working. The little they could tell; they did from sales.
And even when companies, organizations, and businesses were doing very well, sales wise, they were
still not as effective as they could be. That is to say; there were pockets within their marketing strategies
in which they could have cut costs as they were not necessary to the success of these strategies. They,
however, did not know, and so, continued to waste resources on marketing strategies and campaigns
that weren’t entirely effective. And although, sales still constitute a good way of telling whether a
particular marketing strategy is effective or not, it is no longer the only way. In fact, it is not even the
most effective of ways by which a company can tell whether or not it’s marketing campaign is successful.

Enter, closed loop marketing. This concept gained traction with the advent of the internet and the
development of complex online tools such as Google Analytics that allows businesses, companies and
organizations to track the behavior of their customers. As such, you and I can now tell with increased
certainty which marketing strategy is working, why it is working, who our target audience is, how we got
from the marketing process to the sales process, and so on. In short, closed loop marketing changed the
marketing landscape forever, and it was helped along by the internet.

Since you have finished this eBook, I want to believe that now, you understand the case for closed loop
marketing, and that you are a convert. That is to say that, now, you will adopt this concept as the
marketing strategy of your company.

The benefits and advantages of using this particular concept are endless, as you will have found out.
Some of these benefits are; an increase in return on investment (ROI), saving of costs and resources,
more efficiency, and so on.

I will like you to understand that using closed loop marketing effectively, however, requires the
implementation of the things discussed in this eBook. And without these, your adoption of the concept
will have failed from inception. As such, if your sales department and marketing department have some
friction between them, you will have to find a way to smooth things over. Without the collaboration of
these two departments in particular, adopting the closed loop marketing concept will not yield any
result, and your company will continue to lose resources as it will be shooting in the dark with the
marketing strategies it employs.

Armed with this knowledge, I believe that you are poised to help improve the bottom line of your
company through the implementation of the closed loop marketing type, which will help you cut costs
and conserve resources.